Starting a business is tough. Everyone knows this. And, I’ve learnt it the hard way. I’ve built a fair number of products and even successfully brought five of them to market. “Five products” might sound like a lot at first, but it’s actually nothing compared to the number of products and ideas I’ve dismissed. Dismissing bad or even “good” ideas is one of the best things you can do as an entrepreneur because the “good” ideas always steal from the best ideas. Start with absolutely the best idea you can.
So, how do you know if you have the right idea or just a “good” one? With these five lessons, I’ll show you how I learned to see the difference. If I had known and truly understood these lessons from the very beginning, it would have given me five more years to work on my best idea.
1. Embrace the problem.
I often find myself saying sentences starting with: “I would like to do . . .” This sounds harmless at first, but is actually pretty dangerous because it’s solution-centric. A better way to start a sentence would be: “Isn’t it ridiculous that people are still dealing with X problem in 2017?” That’s problem-centric and has a lot of advantages.
I look at the current AI trend and, as someone that has a lot of experience in this field, I get really excited. People are attempting to work AI into virtually everything, but it would be better to find the few big problems where AI can remove a real pain for people. When I look closely at it, I sometimes find that I could solve a problem and serve customers better without any AI at all.
The best ideas often come when you’re looking to solve a problem you’ve had yourself. It’s how many great companies got started: Airbnb started when a guy slept on the founders air mattress during a conference. Larry Page and Sergey Brin wanted a better way to search the internet. Kevin Systrom just wanted to make it easy to create and share beautiful pictures (hello, Instagram).
The main difference between these companies and the AI trend is that they were problem-focused from the beginning. If you are following a trend like AI, wearables, IoT etc., you’re probably focusing too much on the solution and not enough on the problem. While it may be great to be able to have a conversation with your refrigerator, do you need to? I’m pretty sure a shopping list taped to the front of it would probably be easier, because who doesn’t have a pen and paper?
As tempting (and adorable) as it may be, creating an app that filters different puppy breeds over your selfies isn’t going to pay the bills. It may go viral for a while, but in the end it’ll likely not have staying power. Plus, Snapchat could erase your market in a heartbeat. There are thousands of apps and websites that fulfil humanity’s seemingly inherent need for cuteness, for fun or for vanity. But, rarely are they the kind of tool that becomes a necessary part of people’s daily lives.
2. Embrace competition.
I can remember my first time finding a competitor. I was three months into a new project and was browsing the web on a late winter’s evening. And, there it was: The exact same idea, the same solution, but years ahead of me. I was shocked. I couldn’t sleep that night. “How can I possibly get ahead? Or should I quit immediately?”
Fast forward: Today, I not only accept the fact that there is always competition, but also know it’s a good sign when there is (and a big red flag when there isn’t). Even more so: I embrace it. I (try to) start to fall in love with the solutions of my competitors. After all, we are working on the same problem, and they are usually passionate about solving it, too! Having competition proves that there’s a market for your idea. You just need to be better than the existing products on the market. When I started thinking about our latest product, Zenkit, we created a list of over 200 competing products. We learned both the good and the bad things from them.
Whenever I talk to other people in the startup community, I ask, “Why do you think it will make money?” The answer is usually some variation of “Because no one else is doing it!” I’ve heard this many times over my 25-plus years in the business. While I would love to believe that brand new ideas that no one has thought of will continue to come our way, I don’t think that’s usually the case. If no one else is doing it, it means one of two things: Either the guy I’m talking to doesn’t have a complete view of the market, or there isn’t a market in the first place. Google wasn’t the first, Amazon wasn’t the first, and neither was Facebook. They each took an idea and made it better. Good artists copy, and great artists steal ideas.
What happened to that first project I mentioned, you may ask? In that particular case, I quit a week later. Today, I know why: I was in love with the solution and not the problem (see lesson 1).
3. Tell people about it.
I mentor a lot of startups in my local community here in southern Germany. I can almost instantly tell a founder’s personal process by how open they are in talking about their projects.
If they’re talking about NDAs, I know they need more time. I don’t want to pry into all the inner workings of what they’re trying to do, but I need to understand enough to give usable advice. This is really important. Many entrepreneurs think that they need to keep their idea a secret to keep people from stealing it. So I always ask what the problem is that they’re trying to fix and explain that to me instead. Unfortunately, often times I realize that they don’t have a clue about the problem (see lesson 1) or the competition (see lesson 2).
Most ideas have already been thought of, and probably even attempted. The reason you need to tell people about your idea is because you need to validate your idea and make sure it alleviates a real pain for people.
Feedback is absolutely key. It’s all well and good to think that you can develop a product under the radar, and on some magical date in the future, go public and take over the world. The problem is that you’ll have no feedback on whether your final product actually fixes the problem you’re trying to fix. And, you can’t know that until enough people have seen it and told you how, or even if, it helped them. So get your idea out there, get as many people as you can to test it and don’t waste time worrying that someone will copy you. If they do, then they’re further validating your concept — now you just need to work hard to make the best version! Out-performing and executing will almost always win over the first mover in a space.
4. Listen to your customers.
Customers show you the pain and the problem that you’ll need to solve. When I built our first product, Chilibase, it was loved by the press. Everyone was telling me how great it was. I felt great about it, too. Chilibase was built as the first social graph for emails. However, in talking with our customers about it, I got the same feedback nearly every time: “Chilibase is cool, but what I really need is a good way to search through my emails!”
Since Chilibase couldn’t do that, it inspired me to develop Lookeen. Our customers were telling me where it hurt, and it wasn’t where I originally thought it was. At the end of the day, Chilibase was nice to have, but what our customers really needed was a search tool.
The search tool that we built has been successful specifically because we listened to our customers. If you don’t, not only will you miss opportunities, but you might do something much worse: Build a solution without a problem.
5. It gets easier. And it’s worth it.
Using the first four idea filters above, I’m able to zero in on an idea that I’m passionate about, that solves a real problem for people and that has a good chance of making money.
Being passionate about the problem will help you weather the tough times. Starting a business is never easy and there are often hundreds of obstacles, big and small, that you face all the time. Passion not only helps you enjoy the good times, but it encourages you to see the obstacles as opportunities — to learn from your mistakes, accept criticism and maybe change your path when needs be. When you’re able to work through the challenges your business throws at you, the success you gain later on is even sweeter.
This focus on real world issues also helps you stay motivated when facing the tough realities of starting a business. Remember, a single piece of positive feedback from a user can keep you from giving it all up for an easier path. Knowing that you’re making a difference to not just your own life, but potentially the lives of many, is an extremely powerful motivator.
Lastly, finding that pain point and creating the cure will allow you to be more successful. If you’re able to build something that people not only want, but need to use, it will make your push into the market that much easier.
This article was originally posted here on Entrepreneur.com
Put On Your Wellies: It’s Time To Wade Into Risk
Entrepreneurs aren’t all leaping into the unknown like lemmings off a cliff, but they do need to consider it…
You’ve had a great idea. You’ve looked into its development. You’ve recognised that it has potential beyond just what Auntie Mabel and Mike From The Grocer think. And you’ve clearly nailed a pain point that can make money. Now it is time to take the risk of running with it.
Every big idea comes with risk. You can’t step out into the world of entrepreneurial thinking and business development without it. Your idea may fail. It will also be time consuming, demanding, hungry for money, and hard work. It is unrealistic to expect that your project will leap out into the world and be an unmitigated success.
It is also unrealistic to assume that it isn’t worth taking this risk.
There are steps that you can follow to ensure that your risk is managed so you aren’t blindly leaping off that cliff…
Step 01: Do your research
No, canvassing your neighbours, friends and family is not doing research. You need to know that your idea will appeal to a broad market and that it will have significant legs. This may sound like daft advice, but you would be surprised how many people think an idea will take off just because Susan in Accounting said so.
Step 02: Understand the costs
Projects are hungry for money and investment. Realistically work out your budgets and how much it will cost to take your project off the ground and then stick to it.
A calculated risk is a far better bet than one that shoots from the hip and hopes for the best. You can also use this as an opportunity to draw a clear line under where you will stop investing and end the project. If it keeps eating money and isn’t getting anywhere with results you need to be able to walk away.
Step 03: Know when to walk away
As mentioned before, this can be defined by a line you’ve drawn in the proverbial sand (and budget) but no matter where you draw this line, you have to stick to it. Often, when time, money and energy have been poured into a project it can be incredibly hard to walk away.
You think ‘but I have put so much into this, just one more’ and then it gets to a point where the ‘just one more’ has taken you so far down the line that walking away feels impossible. Leave. Learn the lessons. Apply them to your next project.
Mind The Gap
The entrepreneur’s guide to finding the gaps and building the right solutions.
Innovation may very well be the key to business success but finding the gap into which your innovative thinking can fit is often a lot harder than people realise. Some may be struck by inspiration in the shower, others by that moment of blinding insight in a meeting, however, for most people finding that big idea isn’t that simple. They want to be an entrepreneur and start their own high-growth business, but they need some ideas on how to find that big idea.
Here are five…
It sounds trite but networking is actually an excellent way of picking up on patterns and trends in conversation and business problems. The trick is to note them down and pay attention. Soon, you will find patterns emerging and ideas forming.
2. Look for pain
Just as networking can reveal trends in the market, so can spending time reading. The latter will also help you find common business pain points. These are the touchpoints that frustrate people, annoy business owners, affect productivity, or impact employee engagement.
Be the Panado that fixes these pains.
This is probably the most annoying of the ideas, but it is unfortunately (or fortunately) very true. Luck does play a role in helping you capture that big idea. However, luck isn’t just standing around and random people offering you opportunities. Luck is found at networking events, it is found in research and it is found in conversations with other entrepreneurs.
4. Luck needs courage
You may have found the big idea through your network, a pain point or pure blind luck, but if you don’t have the courage to take it and run with it, you will lose it to someone else.
Being bold in business is highly underrated because most people assume that everyone is bold and prepared to take big leaps into the unknown. However, not all brilliant entrepreneurs were ready to throw their family funds to the wind and leap into an idea – they were courageous enough to figure out a way of harnessing their ideas realistically.
5. Pay attention
This is probably one of the most vital ways of finding a gap in the market. Often, people are so busy that they don’t really pay attention to that niggling issue that always bothers them on a commute, or in a mall, or at a meeting. This niggling issue could very well be the next big business opportunity. Pay attention to it and find out if that issue can be solved with your innovative thinking.
5 Things To Know About Your “Toddler” Business
As you navigate this new toddler phase of your business, here are five things to bear in mind.
Ah, toddlers. Those irresistible bundles of joy bring a huge amount of energy, curiosity and fun to any family – but there’s also frustration and worry that comes with their unpredictability, as they grow and start to become more independent. If you own a business and it’s successfully past its “infancy” of the first year or so, it’s likely it will also go through a toddler stage of its lifecycle.
Pete Hammond, founder of luxury safari company SafariScapes, agrees with this. “Our business is now three and a half years old, and we’ve found that we’re not yet big enough to justify employing a large team of people to handle the day-to-day admin tasks, yet we still need to grow the business as well,” he says. “As a result, our main challenge is finding the time to step back and see the bigger picture. Kind of like when you are raising a busy toddler and you spend most of your time running after them!”
As you navigate this new toddler phase of your business, here are five things to bear in mind:
1. This too shall pass
Everything in life is temporary – and that goes for both the good and the bad. It’s as helpful to remember this when you’re facing the might of a toddler temper tantrum, as it is when you’re facing throws of uncertainty in your business. If your new(ish) venture is going through a rough patch in its first few years, it can be easy to think about giving up – but don’t. As long as you have an overall big idea that you believe can add value to your customers, keep pushing through the rough parts until you come out the other side.
2. Appreciate what this phase brings
The toddler years mean that the initial newborn joy is officially behind you. But these small humans also bring their own kinds of joy, as you watch them learn new skills, say funny things, and give affection back to you. While your two-year-old business may not hold the same exhilaration for you as it did during those first few months, there are now different things to appreciate about it: Maybe you’re expanding your product range, or employing new people who can take the workload off you.
3. Establish boundaries
Toddlers thrive on boundary and routine – and your toddler business will too. As it grows into a new phase, try and establish limits in terms of the type of clients you want to work with and the type of work you’ll do. It’s also a good idea to make a decision about the hours you’ll work and when you’ll switch off, which will help you establish a good work-life balance.
4. Take a break
Every parent with a toddler needs a break every now and then, even if that means a walk around the block (on your own!), a dinner out with friends, or even a few days away. The same is true for a demanding small business: every so often, remember to take time out to rest properly, where you switch off your laptop and completely unplug. You’ll return much more inspired and resilient to deal with the everyday uncertainty that it brings.
5. Give it space to make mistakes
While the unpredictability of a young business can be stressful and tiring, it’s also a time for trying new things without the risk of huge consequences if they don’t quite work. After all, it’s much simpler to change your USP if you’re a small business employing a few people, rather than a big company where 50 people are relying on you for their salary, or where you’ve received a huge amount of investment capital. While you may fail in some of the things you try with your business (in fact, this is almost guaranteed), see it as a toddler that’s resilient enough to pick itself up, dust its knees and keep moving forward.
During this phase of business growth it’s also essential to have the right type of medical aid cover. There are medical schemes such as Fedhealth which has a number of medical aid options and value-added benefits to ensure that your health and wellness is taken care of too. After all, the healthier you and your staff are, the more productive your business will be – during the toddler (business) stage and beyond.
While this phase can be frustrating, it’s a sign that your business is growing and adapting, rather than remaining in its infancy, and that can only be a good thing! So embrace the difficulties, learn from them, and watch as your business strides forward confidently into the next exciting phase.
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